REWARDING ROACH
Morgan Stanley’s new Asia chairman is an old hand at helping the bank win lucrative underwriting business in China.
Stephen Roach, Morgan’s longtime chief economist, was officially made chairman of the investment bank’s fast-growing unit yesterday. The promotion, which makes his pay package rise sharply above the $1.5 million or so he is said to take home, is a sweet thank you to one of the hardest working promoters of the Chinese economy.
A longtime bull on China, Roach is going to coordinate Morgan’s relationship “with governments, companies and clients in the region,” and will move to Hong Kong in September.
Occupying a high-profile perch at Morgan, Roach has attracted a lot of attention for his enduring bearishness on the U.S. economy.
This stance has proved embarrassing for Roach, as U.S. GDP figures came in above his estimates, although the recent mortgage-related slowdown might yet vindicate him.
Roach’s love of China’s economy was not purely intellectual, as e-mails obtained by The Post indicate. In one message, Roach detailed to senior executives in September 2003 Morgan Stanley’s role in getting then-Treasury Secretary John Snow to back off the Bush administration’s vow to pressure China over the value of its currency.
“I do believe we should make every effort to let the Chinese know that we played a decisive role in shaping the outcome on a key issue of great strategic importance for them,” Roach wrote to then Morgan honchos Vikram Pandit and Stephen Newhouse.
The debate over the value of the Chinese currency is of crucial importance to U.S. manufacturers, who have been decimated by a currency that they argue is kept artificially cheap.
With an export-driven growth boom, however, underwriters have ample opportunity for stock issuance.
A statement from a Morgan spokesman praised the 25-year veteran Roach as “a household name in Asia.”